Tax Free Bikes

Under the Government’s Cycle to Work Initiative, employers are able to offer their workforce the opportunity to purchase a bicycle, tax free. This can result in saving s for the employee of up to 42%. The bicycle must be used mainly for commuting to and from the place of work.

The scheme involves the company buying the bike on behalf of the employee, then effectively hiring it back to them over the course of a year. The employee sacrifices part of their annual salary to cover the monthly payment, which has the effect of reducing the tax and national insurance paid by both the employee and the company. There is then a final settling up amount at the end of the year, where title to the bike passes to the employee.

Beyond Mountain Bikes are pleased to be partnered with the following companies who facilitate the cycle to work scheme, and are able to accept vouchers and or payments from them:

We are also one of the partnered stores for the Cranleigh School cycle to work scheme which is run through Faircare Ltd. Here’s an example of how the savings work during the hire period, assuming the following:

So, because the participants pay less income tax and NIC their NET salary reduction is less than the GROSS salary reduction, and this is how savings are achieved. In this example, the employee makes a £41.66 contribution to the employer, but it only costs them £28.33, resulting in a saving of £13.33 per month.

Expect to pay either 3% for bikes costing up to £500 or 5% for bikes costing over £500 at the end of the hire period.